Before you begin investing, it is important to determine your investor risk profile. Determining your profile can help you ascertain the level of risk that you are willing to withstand.You should ask yourself, “What kind of investor am I?”
- Am I a high risk taker? If the values of my investment take a dip do I feel comfortable to ride it out? Or
- Am I averse to risk? Will I lose sleep if the value of my assets took a sharp drop?
It is important to note that there are four asset classes based on certain risk profiles:
| Equities | High Risk |
| Property / Real Estate | Moderate Risk (High) |
| Fixed Interest, such as Government Bonds and Fixed Term Deposit | Moderate Risk (Low) |
| Cash | Low Risk |
Remember, each investment option has its advantages and disadvantages which should be explained to you, before you make the decision to invest.